There are only three things that could give up a glimpse of the future: a time machine, the palantír from Lord of the Rings, and strategic foresight. Unfortunately, business leaders only have access to the last one.
Strategic foresight is not just a figment of imagination. It’s a real-world compass.
This tool isn’t a matter of wishful thinking, but rather, a testament to the power of innovation that prepares businesses to thrive in the unknown terrain of tomorrow. By taking the past and present into account, businesses that practice strategic foresight can see the subtle but significant signals that define the future.
How Strategic Foresight Reveals What’s Hidden in Plain Sight
There’s a fine line between foresight and forecast. Forecasting tends to focus on prediction planning, whereas foresight plans are a more comprehensive approach that considers multiple futures. Simply put, foresight is multi-dimensional. There are hardly any blind spots.
Business leaders often overlook the sheer power of foresight, dismissing it as mere speculation or guesswork. It’s not. In fact, it reveals what’s hidden in plain sight through the following methodologies:
- Horizon scanning: This is the foundation of the strategic foresight process. This involves cultivating diverse sources of information (e.g., interviews, desk research, surveys) to identify potential signals of change.
- Scenario planning: Think of it as a series of different road maps. You’re imagining different futures; you need to be prepared for a range of outcomes, challenges, and opportunities.
- Megatrends analysis: We explore the large-scale changes impacting societies and economies worldwide. Consider the megatrend of population aging. Companies attuned to this trend are capitalizing on new opportunities in sectors such as healthcare, finance, travel, and real estate, catering to the specific needs and desires of an older demographic.
- Visioning and back-casting: A powerful vision inspires, unites, and directs. Using these two foresight strategies, we work backward. We identify what steps to take (or avoid) toward a shared, desired future. Keep in mind that this vision is not created in a boardroom. It’s co-created by everyone who shares the same vision.
Again, foresight isn’t speculative sci-fi stuff. It’s founded on data, facts, and publicly available information. The strategy sort of writes itself. It pulls you out of the “old ways of doing business” trap to future-proof your organization. Here are some real-world applications of strategic foresight:
|Strategic Planning Tool||Real-Life Examples|
|Horizon Scanning||The World Health Organization (WHO) monitors potential disease outbreaks and health trends around the world. |
Apple identifies emerging technological trends to inform its product development processes.
|Scenario Planning||Since the 1970s, Shell has been anticipating future energy market conditions. |
During the COVID-19 pandemic, AirBnB adapted its business model when it foresaw changes in the travel industry.
|Megatrends Analysis||Johnson & Johnson identifies opportunities in the healthcare sector and focuses on trends like aging populations and health technology advancements. |
Goldman Sachs pays attention to international trends (e.g., globalization, climate change, and recessions) to inform strategic investment decisions.
|Visioning and Back-Casting||Tesla’s vision of a sustainable energy future shapes its strategic initiatives. |
Starbucks has committed to becoming “resource positive” and has actionable strategies in place.
Strategic Foresight in Practice
Everything happens so fast. Unexpected. And oftentimes, out of control.
In a span of two years, we experienced a pandemic, lockdowns, unforgiving inflation rates, the rise of TikTok, social and political unrest, the shift to remote work, ambiguous grief, loss, new hobbies, and so much more.
This is why you need a future-minded mindset. You have to be ten steps ahead if you want your business to come out on top.
1. Look at Drivers and Signals of Change
Pinpoint the drivers that are most likely going to shape the future of your business or industry. Some examples of these key drivers are regulations, technological advancements, population growth rates, internal organizational factors, environmental concerns, shifts in consumer behavior, and emerging startups, among others.
Take, for instance, the rise of artificial intelligence (AI). It’s a powerful driver of change as its disrupted various industries, from healthcare to manufacturing. Early signals in this context include the growing demand for data scientists, a surge in investment in AI startups, thousands of layoffs, and ChatGPT setting a world record for fastest growing user base (100 million monthly active users in two months).
Related article: AI as a Mini Consultant for Innovation
2. Identify the Most Promising Opportunities
Identifying the most promising opportunities is like finding a needle in a haystack.
This step requires a nuanced understanding of your organization’s capabilities, market dynamics, and the value expectations of your customers. What’s your unfair advantage that allows you to seize emerging opportunities? Do you understand the competitive forces, supply-demand dynamics, and regulatory considerations at play? Does your target market currently have unmet needs?
3. Develop Scenarios
Once you have a list of promising opportunities, it’s time to explore and prepare for several plausible future states. Create distinct scenarios based on critical uncertainties that could affect your business.
For instance, in the context of a renewable energy company, things can go either one of two ways: One scenario is a future with favorable regulations and rapid technological progress, while another could be one with restrictive policies and slow technology development. Each scenario calls for a different strategy.
Again, these scenarios are not predictions but possibilities. Their purpose is not to forecast the future accurately but to prepare for a range of futures. When you adopt a systematic approach to scenario development, you can better prepare for uncertainties and build more resilient strategies.
4. Formulate Clear Visions and Goals
When setting your strategic foresight objectives, it’s important to consider both short-term and long-term horizons. These need to be SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) goals that serve as stepping stones toward your North Star. For example, if your ultimate goal is to be the market leader, a SMART goal could be to “Increase market share by 10% in the next 24 months.”
Your goals must span multiple dimensions: financial performance, customer satisfaction, operational excellence, and employee engagement, among others. Avoid the pitfall of single-mindedly chasing profits at the cost of other aspects of your business.
5. Craft Data-Driven, Actionable Strategies
Words without action are just words.
When you’re armed with foresight, data, and clear goals, you can now formulate actionable strategies. Leverage your strengths; address your weaknesses; exploit the most promising opportunities available to you. This is where the Embiggen Group comes in. You can’t execute everything alone.
Learn From the Future With the Embiggen Group
If the past few years have taught us anything, it’s that life and the world of business can be unpredictable. No one knows what’ll happen next. No amount of research, experience, or technical analysis can give you a 100% guarantee. So while we can’t possibly predict the future to the T, it’s important to have plans in place for different scenarios. You don’t want to get caught off-guard.
Chances are, if you’re a CEO or part of upper management, you’re always looking for ways to be leagues ahead of the competition. You might want to start considering strategic foresight. When done right, you can position your brand at the forefront of change. We’ll work hand-in-hand with you as we navigate through the fog of uncertainty.
Talk to our experts to see what the future has in store for your business today.